The Business Rates Con U.K
In the U.K most businesses pay what is called business rates, which is a fixed rate tax on business. The business rates tax is meant to be paid by business for local provisions provided. This is a complete lie and con as most business receives very few local services.
What the business rates is a additional tax imposed on business who have no votes and cannot vote against it unlike domestic rates which are paid by local tax payers. The business rates are a fixed cost not based on a business’s ability to pay..This means it is an extortion racket by the state on business...only the Mafia operate on this basis which is perhaps where government has got the idea. Small business do get business rate relief based on location and size of premise,most do not.
The way the Business rates is calculated on 50% of the rental value of the business, so if the premise has a rental value is $10,000 the business rates would be $5000,this has to be paid even if the business makes a loss, so it is a fixed cost on business. If the economy is doing well and business are making good profits it is not an issue that gets much attention. With the recent financial crises and change in business patterns i.e. the rise of trade on the internet has affected small business more than large business.
Some business have used the opportunity of the internet to have a shop online, others have located to cheaper areas’s.The absurd situation is that some time the rates can exceed the rent. Recently a large retail premise was advertised with rent of $1 for the first six months. The problem the owner had in renting was the business rates was $15,000 per year.A business friend of mine had to close a new business because the business rates exceeded the rent...so some businesses are working for the tax man..This is an absurd situation.
Successive Governments have used the business rates as a means of collecting shortfalls in tax revenue, while keeping the domestic rates low to avoid a voter back lash. The problem with this tax extortion racket is the internet has enabled some business to locate online and get rid of their expensive bricks and mortar shop with high rent and rates.
So trying to tax someone who works from home, their garage or shed is very difficult. So you would think government would come up with better, fairer system...instead governments simply keep raising the business rates. To better understand what i am talking about...recently a prospective businessman wanted to open a traditional old style sweet shop in the city centre...he worked out his costings..the rent and business rates was $75,000 + $25,000 in expenses total of $100,000..this is before he makes a profit..he worked out that he would need to sell a lot of sweets to make it pay..he made a wise decision not to proceed.
The changing pattern of business means that over 25% of all small shops will close down in the future..while the larger retailers are expanding..managing through clever tax planning to pay very little tax..so in the UK the tax burden have been shifted from the rich to the poor. Small business pay more tax as percentage than big business, in fact the government has created tax loopholes for them to exploit..because they are so desperate for their money(investment) ?.
The UK government is nothing more than a tax extortion Mafia..The business rates con being one of their tactics to extort taxes through threats of violence and intimidation . The Democracy con is used as justification as if you have actually voted for your tax theft for public services which are being reduced and you have limited access to, and never voted for.
Big business have managed to circumvent the business rates con by ,operating from low cost premises which attract lower business rates.The economist magazine devoted a whole article justifying the current situation. The summary of the article was that big business does pay taxes through their employees who pay income tax and insurance. The logic being that money given to employees is tax that they avoid paying. The economist magazine a pro-business,anti-government, promoter of the American Business Model Magazine, increasingly is going to absurd lengths to justify excessive pay for Ceo’s while justifying low pay for workers on the markets know best principle.
As the Neo-Liberal agenda crumbles and it creates more losers than winners, governments are using coercion to beat down the people, big business uses money (investment) as a weapon against government in what it wants, ordinary people are and have been marginalized through the democratic principle, leading to decline in trust, decay of our political, social and economic values. The business rates con continues